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Air Products (APD) Hits 52-Week High: What's Driving it?

Zacks Equity Research

Shares of Air Products and Chemicals, Inc. APD scaled a fresh 52-week high of $210.15 on May 17, before closing the session at $209.92.

The company has a market cap of roughly $46.2 billion. Average volume of shares traded in the past three months was around 1,193.2K. The company has expected long-term earnings per share (EPS) growth rate of 11.8%.

The stock has gained 23.9% in the past year, against the industry’s 33.1% decline.

What’s Driving the Rally?

Better-than-expected earnings, upbeat fiscal 2019 view and bright business prospects are contributing to the rally in Air Products’ shares.

Air Products generated profit of $421.3 million or $1.90 per share in second-quarter fiscal 2019, up from $416.4 million or $1.89 in the year-ago quarter. Barring one-time items, adjusted EPS came in at $1.92, which beat the Zacks Consensus Estimate of $1.88.

The company raised its adjusted EPS guidance for fiscal 2019 to the range of $8.15-$8.30 from previous expectation of $8.05-$8.30. The projected figure suggests a 10% rise year over year at the midpoint.   

Moreover, adjusted EPS for third-quarter fiscal 2019 is expected in the band of $2.10-$2.15, indicating 8-10% rise year over year.

Air Products has a strong project backlog, which is expected to be accretive to earnings and cash flow as they come on stream over the next few years. The company’s investments in high-return projects, business deals and acquisitions are expected to drive results in fiscal 2019. Its productivity and pricing actions are also expected to support margins.

Air Products has a total available capacity to deploy around $16 billion in high-return investments over fiscal 2018-2022, which is expected to boost shareholders’ value. Moreover, the Lu'An project, which is now fully onstream, is expected to contribute more than 25 cents per share to earnings in fiscal 2019.

Air Products and Chemicals, Inc. Price and Consensus


Air Products and Chemicals, Inc. Price and Consensus

Air Products and Chemicals, Inc. price-consensus-chart | Air Products and Chemicals, Inc. Quote


Zacks Rank & Other Key Picks

Air Products currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Materion Corporation MTRN, Fortescue Metals Group Ltd. FSUGY and AngloGold Ashanti Limited AU, all currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Materion has an expected earnings growth rate of 23.1% for 2019. The company’s shares have gained 16% in the past year.

Fortescue Metals has an expected earnings growth rate of 101.5% for the current year. The company’s shares have surged 70.5% in a year’s time.

AngloGold has an expected earnings growth rate of 86.8% for 2019. Its shares have rallied 39.4% in a year’s time.

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